AAR CORP (AIR) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:AIR - US0003611052 - Common Stock
104.06 USD
-1.41 (-1.34%)
104.06 USD
0 (0%)
AIR gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 73 industry peers in the Aerospace & Defense industry. AIR has only an average score on both its financial health and profitability. AIR has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
- In the past year AIR was profitable.
- AIR had a positive operating cash flow in the past year.
- AIR had positive earnings in each of the past 5 years.
- AIR had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- AIR has a Return On Assets of 2.90%. This is comparable to the rest of the industry: AIR outperforms 56.16% of its industry peers.
- AIR has a Return On Equity (6.03%) which is in line with its industry peers.
- With a decent Return On Invested Capital value of 8.32%, AIR is doing good in the industry, outperforming 71.23% of the companies in the same industry.
- Measured over the past 3 years, the Average Return On Invested Capital for AIR is in line with the industry average of 8.56%.
- The last Return On Invested Capital (8.32%) for AIR is above the 3 year average (7.36%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.9% | ||
| ROE | 6.03% | ||
| ROIC | 8.32% |
ROA(3y)2.32%
ROA(5y)2.84%
ROE(3y)4.33%
ROE(5y)4.83%
ROIC(3y)7.36%
ROIC(5y)6.95%
1.3 Margins
- With a Profit Margin value of 3.17%, AIR perfoms like the industry average, outperforming 54.79% of the companies in the same industry.
- AIR's Profit Margin has improved in the last couple of years.
- With a Operating Margin value of 9.40%, AIR perfoms like the industry average, outperforming 58.90% of the companies in the same industry.
- AIR's Operating Margin has improved in the last couple of years.
- Looking at the Gross Margin, with a value of 19.29%, AIR is doing worse than 64.38% of the companies in the same industry.
- In the last couple of years the Gross Margin of AIR has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 9.4% | ||
| PM (TTM) | 3.17% | ||
| GM | 19.29% |
OM growth 3Y14.65%
OM growth 5Y34.25%
PM growth 3Y-52.86%
PM growth 5Y16.72%
GM growth 3Y3.32%
GM growth 5Y7.87%
2. Health
2.1 Basic Checks
- The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so AIR is destroying value.
- The number of shares outstanding for AIR has been increased compared to 1 year ago.
- Compared to 5 years ago, AIR has more shares outstanding
- The debt/assets ratio for AIR has been reduced compared to a year ago.
2.2 Solvency
- An Altman-Z score of 3.54 indicates that AIR is not in any danger for bankruptcy at the moment.
- The Altman-Z score of AIR (3.54) is comparable to the rest of the industry.
- AIR has a Debt/Equity ratio of 0.61. This is a neutral value indicating AIR is somewhat dependend on debt financing.
- Looking at the Debt to Equity ratio, with a value of 0.61, AIR is doing worse than 65.75% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.61 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 3.54 |
ROIC/WACC0.81
WACC10.22%
2.3 Liquidity
- AIR has a Current Ratio of 2.84. This indicates that AIR is financially healthy and has no problem in meeting its short term obligations.
- Looking at the Current ratio, with a value of 2.84, AIR is in line with its industry, outperforming 56.16% of the companies in the same industry.
- A Quick Ratio of 1.31 indicates that AIR should not have too much problems paying its short term obligations.
- AIR's Quick ratio of 1.31 is in line compared to the rest of the industry. AIR outperforms 43.84% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.84 | ||
| Quick Ratio | 1.31 |
3. Growth
3.1 Past
- AIR shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 26.72%, which is quite impressive.
- The Earnings Per Share has been growing by 12.75% on average over the past years. This is quite good.
- The Revenue has grown by 15.40% in the past year. This is quite good.
- The Revenue has been growing slightly by 6.06% on average over the past years.
EPS 1Y (TTM)26.72%
EPS 3Y17.57%
EPS 5Y12.75%
EPS Q2Q%31.11%
Revenue 1Y (TTM)15.4%
Revenue growth 3Y15.17%
Revenue growth 5Y6.06%
Sales Q2Q%15.92%
3.2 Future
- The Earnings Per Share is expected to grow by 18.19% on average over the next years. This is quite good.
- Based on estimates for the next years, AIR will show a small growth in Revenue. The Revenue will grow by 1.07% on average per year.
EPS Next Y22.08%
EPS Next 2Y19.47%
EPS Next 3Y18.19%
EPS Next 5YN/A
Revenue Next Year18.09%
Revenue Next 2Y14.21%
Revenue Next 3Y11.37%
Revenue Next 5Y1.07%
3.3 Evolution
- When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
- The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- AIR is valuated rather expensively with a Price/Earnings ratio of 23.60.
- Based on the Price/Earnings ratio, AIR is valued cheaply inside the industry as 90.41% of the companies are valued more expensively.
- AIR is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 28.60, which is the current average of the S&P500 Index.
- The Price/Forward Earnings ratio is 18.69, which indicates a rather expensive current valuation of AIR.
- Based on the Price/Forward Earnings ratio, AIR is valued cheaply inside the industry as 95.89% of the companies are valued more expensively.
- The average S&P500 Price/Forward Earnings ratio is at 25.83. AIR is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.6 | ||
| Fwd PE | 18.69 |
4.2 Price Multiples
- 90.41% of the companies in the same industry are more expensive than AIR, based on the Enterprise Value to EBITDA ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 15.02 |
4.3 Compensation for Growth
- The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
- AIR has a very decent profitability rating, which may justify a higher PE ratio.
- AIR's earnings are expected to grow with 18.19% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.07
PEG (5Y)1.85
EPS Next 2Y19.47%
EPS Next 3Y18.19%
5. Dividend
5.1 Amount
- AIR does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0% |
AAR CORP / AIR FAQ
What is the ChartMill fundamental rating of AAR CORP (AIR) stock?
ChartMill assigns a fundamental rating of 5 / 10 to AIR.
What is the valuation status of AAR CORP (AIR) stock?
ChartMill assigns a valuation rating of 5 / 10 to AAR CORP (AIR). This can be considered as Fairly Valued.
Can you provide the profitability details for AAR CORP?
AAR CORP (AIR) has a profitability rating of 6 / 10.
How financially healthy is AAR CORP?
The financial health rating of AAR CORP (AIR) is 4 / 10.
What is the expected EPS growth for AAR CORP (AIR) stock?
The Earnings per Share (EPS) of AAR CORP (AIR) is expected to grow by 22.08% in the next year.